27 July 2016
The domestic SBR market suffered from aggravated oversupply in the previous year. As the largest derivative of SBR, the downstream tyre industry was bearish with prices plunging in the year because the domestic vehicle market development confronted with the bottleneck and the US and other countries took a series of protectionist policies.
In addition, the weak crude oil and macro-economy, as well as the sluggish NR market, cast a cloud on the SBR market.
Thus, domestic SBR prices moved down and hit new lows since late December 2008. The price range narrowed further, especially in the second half of 2015. For example, the prices of non-oil grade SBR 1502 in east China were in the range of CNY8,550-10,900/tonne EXWH in the year, with the gap between the high and the low end not higher than CNY2,350/tonne.
Amid the bearish market sentiment, participants along the SBR industry chain were more cautious in operation. Producers cut operating rates in view of negative profits. Few traders stockpiled large-volume cargoes. The low run rates and traders’ low inventories, together with rising values of feedstock BD, pushed up the SBR prices during some periods, but the price rises were short-lived and small as a result of weak support from the major downstream tyre industry.
China’s apparent demand for SBR was expected to be 1.32m tonnes in 2015, down by 0.9% from 1.34m tonnes in 2014. Uncommonly, the downstream tyre market experienced a negative growth in 2015, and the vehicle market was also in trouble. Following de-stocking early in the year, domestic tyre producers suffered mounting inventories in 2015, because the US’ anti-dumping and anti-subsidy measures greatly dampened China’s tyre exports.
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